Local content performance

lorium ipsum amit

NCOC believes that activities performed under the NCSPSA offer a significant opportunity to develop the Kazakhstan economy in a sustainable manner. First and foremost, we believe this can be achieved by managing our own business safely, responsibly, efficiently and transparently, in compliance with all applicable laws and regulations of the Republic of Kazakhstan. The Kashagan project marked the start of the offshore oil development in Kazakhstan. When the decision was made to implement this highly challenging project; support bases, infrastructure, construction equipment, marine vessels and drilling rigs needed for the development of the project did not exist in the Caspian region. Substantial investments into the development of local suppliers, workforce and infrastructure have resulted in the establishment and growth of various industries in Kazakhstan.

achievements in local content development

From 2004 to 2023 over 1,700 local companies have participated in workshops and forums organized by NCOC. These range from general awareness seminars to introduce the project and its contracting requirements, to more specialized seminars on tender writing and pre-qualification processes.
From 2004 to 2023 the operator assisted over 228 local companies to obtain international standards certifications (ASME, API, ISO) for their management, goods and services, thus significantly increasing their competitiveness for contracts with NCOC.
From 2004 to 2023 NCOC conducted over 528 technical qualification audits and site visits of local companies, assessing their ability to meet demanding specifications and international codes and standards for goods and services put out for bid by the North Caspian Project.
From 2004 to 2023 the operator provided more than 5,390 employees of local companies specialized professional trainings in the most in-demand craft skills, such as Working in Confined Spaces, Industrial Welding Safety, Electronic Systems and Assembly, Working at Height, Mobile Crane Operations, NDT training, etc. Also, over 560 employees of local companies have successfully completed NDT training courses and certification arranged by NCOC up to 2023.

Some definitions in accordance with the Act On subsurface and subsurface us

Unified Methodology for calculation by organizations of Kazakhstan’s content in procurement of goods, work and services — the procedure to be approved by the Government of the Republic of Kazakhstan which is applied to calculate Kazakhstan’s content in procurement of goods, work and services;

Kazakhstani manufacturer of goods citizens of the Republic of Kazakhstan and (or) legal persons of the Republic of Kazakhstan that produce goods of Kazakhstan origin;

Kazakhstani manufacturer of work, services citizens of the Republic of Kazakhstan and (or) legal persons organised in accordance with the legislation of the Republic of Kazakhstan, with the place of location in the territory of the Republic of Kazakhstan, that use not less than ninety-five per cent of citizens of the Republic of Kazakhstan in the total number of employees;

Goods of Kazakhstan origin goods to which a certificate of origin of goods for home circulation is issued that confirms they originated in the territory of the Republic of Kazakhstan;

Kazakhstan’s content in goods a percentage of the value of used local materials and costs of the manufacturer of goods relating to processing of the goods, which are incurred in the territory of the Republic of Kazakhstan, in the final value of the goods;

Kazakhstan’s content in work (service) a total summarized portion of the value of Kazakhstan’s content in goods that are used in performance of work, in the price of a contract and (or) work remuneration to employees who are citizens of the Republic of Kazakhstan in the fund for work remuneration of the manufacturer of work (service) under a given contract for performance of work or rendering of the service, less the value of goods that are used in performance of work, and prices of subcontracts;

Kazakhstan’s content in personnel a number of Kazakhstan personnel in per cent of the total number of personnel engaged in the implementation of a given contract, with breakdown by categories of workers and clerks.

INDUSTRY DEVELOPMENT ACTIVITIES

The operator has developed a systematic approach to local industry development, which in turn, represents a cyclic process with four main phases: planning, development, realization and monitoring. As part of planning phase NCOC developed and endorsed the long-term Program for the development of local content to identify Kazakhstan market opportunities and potential, raise local suppliers' capabilities within the framework of developing the Kashagan field and other projects where specific objectives have been set for increasing the proportion of local content. For all contracts the local content strategies are implemented at the earliest possible stage allowing for capacity development of local companies. During engineering and design stages of work the opportunities for local suppliers are maximized to ensure that out of country engineering contractors incorporate wherever possible local specified materials and equipment within design (GOST). To leverage local content development opportunities the analysis of the future needs of the project is carried out and consolidated in the Company's long-team procurement outlook.

Manpower Development

The dynamically developing oil and gas sector offers a plenty opportunities to the young Kazakhs. By virtue of its innovation and technical complexity, it requires the utmost professionalism from those working on it. In line with the provisions of the agreement on the North Caspian Sea, the requirements of the law, the plans and objectives set by the RoK Government, NCOC is seeking to increase local content to a maximum. The Company has drawn up a long-term programme for raising the professionalism of Kazakh specialists with the aim of gradually replacing foreign staff with local personnel. The operator uses a variety of approaches and procedures in its efforts to, over time, substitute foreign specialists with skilled local workers, who are suitably trained and experienced. A nationalization program guides this process.

NATIONALIZATION OF WORKFORCE

The PSA specifies (art. XXVII) the overall targets in terms of manning levels of Kazakhstan citizens employed in carrying out Petroleum Operations. The Kashagan Project significantly exceeds these targets. At the end of 2023, 96% out of over 2880 employees of operating company NCOC are Kazakhstan citizens, and 95% out of over eight thousand Contractors engaged in the North Caspian Project are Kazakhstan citizens.